Bitcoin rejects ‘real’ Satoshi Nakamoto in favour of leaderless ideal

In the hours after Newsweek claimed to have
discovered the identity of the mystery-shrouded creator of the
bitcoin cryptocurrency -- pointing fingers at a 64-year-old retired
engineer named Dorian Satoshi Nakamoto -- a gaggle of reporters
showed up on the man's lawn in Southern California. And when he
hopped into a blue Toyota Prius with one reporter, the rest of them
piled into their own cars and chased him through the streets of
downtown Los Angeles, desperate to get the story behind the myth of
bitcoin's founding father.

But those at the heart of the bitcoin community responded quite
differently. The lead developer of the software that drives the
bitcoin system was angry that Newsweek had gone
after this man and his family, publishing his license plate number
and a photograph of his house, and many others
agreed. Even before the Associated Press reported
that Dorian Nakamoto had denied any involvement with the digital
currency, the bitcoin faithful were sure
that Newsweek was mistaken. At the online
discussion forum Reddit, one person immediately pointed out that at
approximately the same time that bitcoin was released, Dorian
Nakamoto was online writing letters to a model train magazine. "I don't think it's him," bitcoin
enthusiast Fred Friis told us soon after
the Newsweek story broke, with no further
explanation.

The bitcoin community has now rejected the Newsweek article because so much evidence
has piled up against it. But underpinning the immediate and
categorical rejection of Dorian S. Nakamoto is another phenomenon:
Bitcoin is -- by design -- a leaderless project.

The digital currency runs best that way. Though many are curious
about the real identity of the man who founded the project under
the name Satoshi Nakamoto, many are also very comfortable with his
anonymity. In fact, this anonymity has become an essential part of
bitcoin's evolution. If bitcoin exists to manifest the libertarian
ideal that money can be exchanged far from the prying eyes of
governments and corporations, then the anonymous Satoshi -- too
smart to ever be ID'd, too cool to even spend his estimated $400
million (£240 million) in bitcoins -- is the real-world John
Galt.

Bitcoin's public ledger of digital transactions doesn't exist in
any one place. It exists everywhere on the network. Bitcoin works
by consensus. The Bitcoin Foundation's Gavin Andresen (who now says
he regrets talking to Newsweek about the story)
may be the closest thing that bitcoin has to a leader, but if the
bitcoin miners don't like the software he and his team of bitcoin
hackers create, they don't have to install it. "It's peer to peer.
It's open source. It's consensus-driven. And I think the idea that
there's any one person that's a leader or a controller is
antithetical to the nature of bitcoin," says Jean-Jacques Cabou, a
partner with Perkins Coie, a law firm that advises many bitcoin
companies on regulatory issues.

No Julian Assange, please Bitcoin, the money of choice for anarchists, has managed
to become an $8 billion (£4.8 billion) currency without any
identifiable leader. And without its own version of Julian Assange
or Linus Torvalds, criticisms about bitcoin naturally become
focused on the code and on the people building businesses on top of
it. That's the point of bitcoin. With bitcoin, you don't have to
trust anyone. You can just trust the code. The epic failure at Japanese bitcoin exchange Mt. Gox is an
illustration, not a rebuttal, of that idea. Gox failed because its
customers had to put their faith in the company, but the bitcoin
network itself was untouched.

Two years ago, a bitcoin fan named "Myrtlewood," put it this way when people were trying to identify
Satoshi: "I hope we never find out who Satoshi is. Men are weak,
ideas are bulletproof."

As blogger Timothy Lee has pointed out, having an overly strong Bitcoin founder could
create uncertainty about bitcoin's technical future. A strong
leader "would have been a liability in bitcoin's early years," he
writes. "As bitcoin's creator, Satoshi Nakamoto would have had a
unique ability to change the rules of the game and get the bitcoin
community to accept the changes." This sort of thing could still
undermine the digital currency. At the moment, the bitcoin system
will eventually stop making new currency, and no central authority
-- no government, no Fed -- can come in to make more, a move that
would devalue bitcoins. But what if the leader returned? What if he
called for an expansion of the currency, acting as a de facto Fed
chairman?

What's more, if Satoshi is identified, it could cause extreme
personal problems for this individual -- as the events of yesterday
and today have shown. Reporters are still camped out on Dorian
Nakamoto's lawn this morning. A publicly identified Satoshi could
be the subject of civil lawsuits or regulatory inquiries. "It's
very easy to get sued once people know who to sue. Whether there's
merit to the suit is another question," Cabou says. And with the
real Satoshi controlling an apparent $400 million (£240
million) in online currency, he could also be targeted by
criminals here in the real world.

Deja vu all over again
As yesterday wore on, the bitcoin masses only became more
convinced that Newsweek was mistaken. They
complained that the man Newsweek had fingered as
bitcoin's creator seemed more like a crank than a crypto-genius.
The man in Los Angeles appeared to be a guy who was obsessed with
model trains and free lunches, who wrote badly written reviews of
double-edged razor blades and Danish butter cookies, and who,
during his two-hour interview with the AP, repeatedly and
mistakenly referred to the world's most popular digital currency as
"bitcom." And, most of all, they didn't believe that the founder of
bitcoin would have used his real name in starting the project.

Curiously, that's a premise
that Newsweek itself was forced to
simultaneously accept and reject in its reporting. The "trail
followed by Newsweek led to a 64-year-old
Japanese-American man whose name really is Satoshi
Nakamoto," Newsweek reports, glossing over the
fact that Nakamoto had changed his name to Dorian Prentice Satoshi
Nakamoto back in the 1970s. If Dorian Nakamoto wanted to use his
real name, why not put Dorian Nakamoto on the original bitcoin
paper?

Either way, this isn't what people who know bitcoin would expect
of the currency's true founder. Bitcoin's Satoshi Nakamoto was
someone who had divulged almost no personal information about
himself -- who has not spent any of his bitcoin fortune because
that could give researchers a way to identify him. "I would never
have expected that his real name was in fact Satoshi Nakamoto,"
said Sergio Lerner, a security expert who investigated some of the
early online activity of bitcoin's founder, writing via email.
"This does not match with the degree of anonymity he was trying to
keep."

Garzik is right. Newsweek's evidence is pretty
weak. Tracked to his Temple City, California, home, Dorion Nakamoto
never actually admitted any involvement in bitcoin
to Newsweek's reporter, Leah McGrath Goodman (she
didn't respond to our requests for comment). Hounded by reporters,
Dorian Nakamoto eventually told the Associated Press that
he hadn't heard of bitcoin until three weeks earlier, when his son
was contacted by a reporter. Online, there's a donation fund that
aims to buy Dorian Nakamoto some trains to compensate him for the
media horde that has descended on his front lawn for two days
running.

In some ways, we're just repeating history. Dorian Nakamoto
isn't the first person to be fingered as bitcoin's creator. In a
2011 New Yorker piece, Joshua Davis suggested
that Satoshi might be a Dublin researcher named Michael Clear.
Shortly after Davis's story was published, a journalist named Adam
Peneberg analyzed Satoshi's writing to conclude that Nakamoto was actually three people: Neal
King, Vladimir Oksman, and Charles Bry. But these claims were
mostly debunked.

By the end of the day yesterday, the bitcoin community had
pretty much unanimously decided that Dorian S. Nakamoto was not the
real Satoshi either. So the mystery remains. And Bitcoiners seem to
like it that way.